In a 50-year involvement in politics and 20 years in the House of Commons, I found that friendship is perfectly possible with people of very different political views from my own; indeed, some of the more stimulating and amusing companions came from the ranks of those whose political views I abominated.

I have often puzzled over the fact, therefore, that people who are so agreeable in personal terms can hold views that are so unattractive. People who are kind to animals, generous to their friends, and supportive of family members who need help, can often exhibit a breathtaking – and at times cruel – lack of generosity, compassion and understanding when it comes to those who are a little more distant from them in social or cultural or ethnic terms.

My explanation of this apparent paradox is that people who hold right-wing views (excluding those who are just plain nasty) often suffer from a simple failure of imagination. Their impulses are fine and generous when they relate to people who are recognisable and close to them. But they are unable to project those commendable responses on to a wider scale because they simply cannot understand that society is made up of people who are just as dear to others as their own friends and family are to them.

The rich and privileged are even more prone to this limitation than most of us. Like most people, they are more than capable of seeing only what they want to see and ignoring what they wish not to see. The advantage they have is that their wealth allows them to indulge these idiosyncrasies to a much greater degree than the rest of us.

The starting, or default, position for many people, in other words, is that looking after themselves and their immediate families is the first priority. It requires real effort to persuade them that they can afford what might be seen as the luxury of thinking of others. People are often reluctant to lift their eyes from the immediate and close at hand, and to understand that taking the wider view can lead to a better life and a stronger society for everyone.

Even when that effort is made and greater understanding of others arrived at, the prospect of hard times is often enough to send them hastening back to base. When crisis threatens, the hatches are battened down and the wagons are circled to face the enemy. Any thought of social concern is abandoned; self-preservation is the first consideration.

That is, I think, the explanation of the otherwise inexplicable fact that, in the midst of recession, when it would seem even more important than usual that people should recognise common cause and support each other, the response is in the opposite direction, and many become more fearful of other similarly disadvantaged people, more focused on self-protection and self-preservation and less generous towards the claims of others.

Roger Scruton, (The Guardian, 10 September) seems to agree with me. His explanation and defence of what it means to be a Conservative – with its emphasis on the supposed imperatives of identity and attachment – is little more than a re-statement, in slightly more elegant language, of the traditional Tory preoccupation with the differences between “us and them”.

The “way of life” enjoyed by “who we are” – those with whom, Scruton says, we identify and to whom we feel an attachment – begs all the obvious and age-old questions. Whose “way of life” are “we” talking about? Do we mean just those of us who are more than ready to join with us in defending the status quo and the privilege we enjoy at the expense of others? Do we exclude from the definitions of “us” those who, because they are different or are perhaps – according to our criteria, less worthy – do not share “our way of life” as we choose to define it?

Scruton obligingly helps us with the answer. “Attachment,” he asserts, “is a form of discrimination and therefore a way of giving preference to those who already belong.”

There is little of philosophy here. What we have is after all just another expression of self-interest and exclusion. Are his “attachment” and “identity” not just different ways of applying and emphasising difference from others? And no prizes for guessing who, in Scruton’s brave old world, will have the power to decide the criteria that will identity those who are or are not “one of us”.

Even if we accept Scruton’s identification of the threats to our “way of life”, is it really the case that looking inwards is the best form of defence? Which is likely to be the stronger and, in the long run, more successful – a society that is fearful of change and difference, that instinctively excludes rather than includes, that divides and weakens, or one that embraces and values all its members, that builds its cohesion and therefore its strength?

And should we really weep many tears for the poor hard-pressed Conservative, who finds it so difficult, Scruton says, to persuade people to think only of themselves? Perhaps he should try, for once, to see how easy it is to ask them to lift their eyes to a wider horizon.

Labour will be “tougher than the Tories” when it comes to forcing long-term beneficiaries back into the labour market; so Labour’s new shadow Work and Pensions Secretary, Rachel Reeves, was reported as saying last week. The comment, which was presumably made deliberately to secure the headline, seems to be a mistake on a number of levels.

The report suggested that the comment was a response to polling that showed that voters were twice as confident of the Tories’ effectiveness in dealing with the issue as they were of Labour, and was presumably an attempt to nullify the supposed advantage that the Tories enjoyed.

But my own political experience, and particularly experience of campaigning, suggests that the initiative was based on a false premise. Most voters, unlike those who are politically active and committed, do not have coherent political positions that are consistent across all issues. They are perfectly capable of adopting attitudes that contradict each other from one issue to the next.

What determines the way they vote is not necessarily what they think on a given issue but which issues are uppermost in their minds on polling day. History shows that, with their allies in the right-wing media, the Tories are expert at tweaking the issues that give them an advantage at the crucial time.

So, immigration, supposed benefit “scroungers”, trade unions bent on strike action, all attract headlines as part of a deliberate attempt to raise the salience of issues that suggest that our deep-seated problems are caused by failing to rein in the nefarious activities of ordinary people and are in no way the responsibility of the powerful people who run our economy and take most of its benefits.

It is an important part of this well-proven strategy that Labour should be lured into contesting such issues so that public attention is focused on them. I recall that, in the run-up to the 1992 general election, the Tory press provided the “oxygen of publicity” to fears that a new Labour government would raise income taxes.

The Labour response was to launch, at the beginning of the election campaign, a plan to raise National Insurance contributions. The idea was to use John Smith’s Scottish prudence to show that this was a sensible initiative that should not be regarded as an increase in taxes.

Not surprisingly, this proved difficult to sell to the electorate. Labour’s tax plans became the dominant and continuing theme of the election campaign, with the result that John Major’s government was re-elected.

The lesson to be drawn is that election campaigning is largely about controlling the agenda. A successful opposition campaign should be about exposing the government’s failures and focusing on those elements in its own policy that are likely to strike a chord with most voters.

Time spent on trying to negate vulnerability on issues peddled by the Tories, in other words, is likely to be wasted at best and counter-productive at worst. And that is never more true than on the issue on which Rachel Reeves thought it wise to make her own demarche.

Her comment spells bad news for Labour. It focuses attention on an issue which can only benefit the Tories. No one will believe that on this issue the Labour opposition will be as ruthless as the Tories (and heaven help us if they did!) The most the voters should hear from Labour on the issue of benefit fraud is that, as in every part of public spending, dishonesty will be punished and value for money will be insisted upon.

But what it does do is to validate the Tory insistence that benefit fraud and supposed “scrounging” is an issue that deserves to be at the top of the government agenda. The more Labour proclaims its “toughness’, the more voters will believe that this is an issue that deservedly requires priority government attention – and the more likely they are to think that Labour is simply posturing and that only the Tories are to be trusted to take real action.

Worse, it diverts attention from what Labour should really be saying about the fact that so many people are victims of unemployment and are therefore forced to depend on a generally miserable level of benefits in order to keep house and home together.

The most effective means of reducing the number of beneficiaries would be, in other words, not punishing the unemployed further, but restoring something approaching full employment; and the most important obstacle to that is a damagingly under-performing economy, the direct consequence of failed government economic policies and of their insistence on austerity as a response to recession (now disowned by the IMF, no less) in particular.

Nor is it the case that this is an accidental by-product of Tory policy. It is an essential part of the Tory strategy that the burden of getting our economy moving again is to be borne by working people. According to this doctrine, it is their responsibility to price themselves back into work by accepting lower wages, and accepting fewer rights and protections at work – “zero hours” contracts are a good example.

The pressure on beneficiaries is all of a piece with this approach to our economic problems. In the absence of new jobs, forcing the unemployed back into the labour market can only mean that those with jobs will be compelled to withstand that competition by accepting lower wages if they wish to stay in work. The result? Downward pressure on wages as a whole.

Is this the strategy that Rachel Reeves intends to endorse? Wouldn’t she do better to focus on unemployment and its causes, and persuading her colleagues to develop a strategy for dealing with it?

When Harold Wilson’s incoming Labour government prepared itself in 1964 to make good the damage done by “thirteen wasted years” of Tory government, its fate was sealed even as it took office. Fearful of fulfilling a Tory stereotype, the decision was immediately taken to resist a long overdue devaluation of the pound. There followed three years of struggle before yielding to the inevitable; the 1967 devaluation was represented as a defeat, and led inexorably to the loss of the 1970 election.

Labour and the left have always been reluctant to challenge the economic orthodoxy promoted by their opponents and, as a result, have implicitly conceded that the Tories know best – a judgment not surprisingly endorsed, in the absence of arguments to the contrary, by public opinion.

We are at it again. Labour is again advised by its friends that, if we are to win the next election, we must demonstrate that we are ready to perpetuate Tory mistakes by taking the “tough” decisions – for which read imposing yet more cuts and austerity. Anything less, we are assured, will show that we are not ready for government.

So, the search is on to identify the cuts that will show that we too are ready to inflict more pain. But to undertake that search is to disable ourselves from making an effective critique of a Tory economic failure that we seem implicitly to endorse, and to condemn an incoming Labour government to implementing a policy forced upon us by our defeated opponents.

Surely though, as the country’s problems deepen, the decisive action that the voters crave may not be “tough” action that piles on yet more misery, but a clear break from the nostrums that have dominated policy for more than thirty years. Labour’s best chance lies in changing the rules of the game and looking at our problems through a lens that rejects the priorities imposed by a discredited neo-liberal orthodoxy.

We don’t need to look far for the broad outlines and central themes of a clear alternative. The first requirement is to ask the right questions so that our real problems are accurately identified. For example, why do we not seek the growth that, by definition, is essential if we are to escape recession, reduce the government deficit and restore full employment? Because we dare not. And why is that? Because we know that a dash for growth, in light of the parlous state and long-term lack of competitiveness of our productive sector, would immediately be stymied by rising inflation and a worsening trade deficit.

Retrenchment can only compound these problems. If we are to escape the dilemma, it is essential that we address the real obstacles to a growth strategy – the need to rebuild our productive base, in the face of a massive loss of competitiveness and an apparent shortage of liquidity and capital for investment.

In the last three decades, while the rest of the world – China, India, Korea, Brazil, and many others – have become more efficient and competitive as manufacturing economies, we have literally paid no attention to our own declining competitiveness. We have thereby turned our backs on manufacturing, and its unmatched ability to create jobs, stimulate innovation, produce an immediate return on investment and encourage new skills; we decided instead to stake our future on the fool’s gold produced by a financial services industry that – even at best – produced benefits for only a tiny minority.

But, it may be asked, even if we were now to pay attention to improving competitiveness and to understand the vital role of the exchange rate in that undertaking, won’t rebuilding our manufacturing industry cost us money we don’t have? No. As Keynes said, “there are no intrinsic reasons for a scarcity of capital”. There is no shortage of money; it is simply going to the wrong places. The creation of credit by the banks – by far the most important (and virtually unrestrained) element in the growth of the money supply – goes mainly to house purchase; the “quantitative easing” by the Bank of England has gone straight into the banks’ balance sheets. These major sources of new money are cost-free but are not devoted to productive purposes.

We have allowed self-interested bankers to persuade us, in the name of monetarism, that growth in the money supply is a dangerous phenomenon that must always be restricted for fear of inflation; but more successful economies have understood that credit creation directed to productive investment in accordance with an agreed industrial strategy – as the Chinese and Japanese are currently doing – will not be inflationary when it stimulates increased output.

A focus on competitiveness and on ensuring an ample supply of investment capital for productive purposes means that our successful competitors can make full use of their productive capacity. We, on the other hand, are happy to tolerate a high rate of unemployment, with all that means for lost productive capacity and social dislocation.

A Labour commitment to make full employment the central goal of policy – a goal for which responsibility could not be shuffled off on to unaccountable bankers but would be the issue by which a Labour government wished to be judged – would be welcomed as a decisive break with the neo-liberal era. Full employment, after all, is the hallmark of a properly functioning economy; there is nothing economically efficient about keeping people out of work.

The fainthearted should be reassured. This approach to economic policy is tried and tested; it has been successfully deployed by other more successful economies over a long period. It is just that we have been too arrogant to notice.

Bryan Gould

29 May 2013

This article was published in Comment Is Free, The Guardian, on 30 May